Sequestration will cut unemployment benefits by 9%
Sequestration would cut emergency unemployment compensation for long-term unemployed Americans by as much as 9.4%, according to the Department of Labor.
Learn More: 5 key facts about sequestration
Unless Congress and the White House reaches a deal to avert sequestration by March 1, the discretionary budget will suffer $1.2 trillion in across-the-board cuts on top of the $1 trillion cuts and spending caps imposed by the Budget Control Act in 2011. The Department of Labor is funded through the non-defense discretionary budget.
Thus, if sequestration takes effect, more than 3.8 million Americans would see their emergency unemployment compensation reduced. The average individual would “lose an average of more than $400″ in unemployment benefits – a significant blow to job seekers trying to make ends meet.
“Smaller unemployment checks will also have a negative impact on the economy as a whole,” noted Seth Harris, Acting Secretary of Labor, to the Senate Appropriations Committee. “Economists have estimated that every dollar in unemployment benefits generates $2 in economic activities.”
Furthermore, sequester cuts would reduce funding for states to administer the unemployment insurance program, leading to delays in processing claims and more backlogs of appeals.
- Senate Appropriations Committee: Letter on the impacts of sequestration from Acting Secretary of Labor Seth Harris – Feb. 2013 (PDF)
- WhatTheFolly.com: Overview of Department of Labor sequester cuts
- WhatTheFolly.com: 5 key facts about sequestration
- WhatTheFolly.com: Analysis: Impact of sequestration on non-defense discretionary spending
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